Ad Execs See TV Budgets Moving Into Online Video

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A MAJORITY OF TOP AD industry executives expect a significant share of
their broadcast and cable TV advertising budgets to shift to online
video buys within the next few years, according to results of an
annual survey on industry trends released Tuesday morning by the
American Advertising Federation. More than half (53%) of the 168
respondents said they expect 20% or more of their TV advertising
budgets to shift into online video by 2010 (see table below). "The
determining factor will be the sheer volume of online opportunities,"
said one agency executive participating in the survey. "Will there be
a handful of sites that rise above the fray or will there be so sites
to choose from that the media dollars can't possibly cover enough
bases to be effective?"
The study also indicates that ad executives believe traditional
broadcast TV outlets will be the most effective in integrating
traditional TV and online media into seamless marketing solutions for
advertisers and agencies. Asked which media they believed to be most
"innovative" at leading such integrations, 21.7% of the respondents
cited broadcast TV, followed by newspapers and magazines (18.5% each),
cable TV (15.2%), and radio and out-of-home (8.7% each).
Asked which traditional medium is most effective in terms of driving
traffic to advertiser Web sites, 26.0% cited magazines, followed by
broadcast TV (17.8%), cable TV (16.4%), newspapers (13.7%), radio
(11.0%), and radio (8.2%).
The survey also indicates that online ad budgets are expected to rise
by an average of 42 percent in 2007 vs. 2006. Respondents said they
expected 23.2% of their total 2007 ad budget to be spent online, up
from 16.3% of their 2006 advertising spending.
The study, which was prepared by Atlantic Media Company, is the fourth
annual survey to be issued by the AAF.

Share Of TV Ads Shifting To Online Video By 2010
Less Than 1%: 2.6%
1-5%: 9.8%
6-9%: 11.1%
10-19%: 33.3%
20-29%: 34.8%
30-39%: 11.1%
40-49%: 5.9%
More than 50%: 1.3%
Source: 2006 AAF Survey of Industry Leaders on Advertising Industry
and New Media Trends. Base = 168 respondents.